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[Shortcrust]

Good morning to you all,

The newly established strata committee is worried that some owners some will seek to continue breaching by-laws and decided to ask owners at an upcoming general meeting of the OC to give the committee no ceiling on the amount they can spend – on enforcing by-laws i.e. legal expenses –  without seeking approval of the OC on a case by case basis.

Many owners on the 40 lot strata are clueless or apathetic, but I worry about a power hungry committee or a discriminatory committee member/s spending – with a blank cheque –  bucket loads on legal costs for enforcement blind to the fact that (a) the cost to enforce often greatly exceeds the alleged harm done by the owner concerned and (b) even if the strata wins the case at a hearing, most often each side pays their own costs.

(1) I am keen to hear what steps I can take to nip this power trip in the bud. That is, kick it out of the park at or before the forthcoming general meeting.

(2) Some genius on the committee wants to set up a third fund specifically for legal costs of the OC ie an additional find to the Admin and Sinking. She wants to call it the “Enforcement Levy”. Is this even legal? What can I do about this outrage?

Thanks on advance to all who reply.

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[Quirky]

At an AGM the owners can restrict the strata committee’s actions, such as limiting the amount they can spend without the approval of the owners at a general meeting, under section 36(3)(b) of the Strata Schemes Management Act.  Namely, ” a decision on any matter or type of matter that the owners corporation has determined in general meeting is to be decided only by the owners corporation in general meeting. ”

So you can propose motions to be voted on at the general meeting, such as requiring any legal expenditure dealing with a by-law breach to be approved at a general meeting. But is the owners are apathetic, or angry at misbehavior, then they won’t attend, or may agree with the action.

Section 103 of the Act limits legal expenditure, in any case:

Urgent legal action	Up to $15,000	Committee alone
Non-urgent legal services	Up to $3,000	Committee alone
Pre-action legal advice	No dollar cap	Committee alone
Recovery of unpaid levies	No dollar cap	Committee alone
Anything else above thresholds	Any amount	General meeting resolution required

And no, additional funds, are not permitted, other than the Administration and Capital Works funds, although a portion of funds can be earmarked for a purpose, I assume, and if the funds are collected via a special levy, then the purpose described for the levy must be followed.

A better approach is to distract the committee from obsessing about owner’s annoying behaviour to focus on real issues. At the meeting, analyse the budget, and suggest that the money wasted on inane by-law prosecution should be spent on cleaning, or repairing the roof, or not collected at all. You can suggest that the amount in the budget spent on legal matters, last year, be halved, due to the lack of success, and that money put to another more concrete use.

But if by-laws are not being followed, and that is causing real problems, then those issues have to be addressed. But if the past legal approach is not achieving progress, try other approaches. For example, parking issues might be fixed by installing a boom gate, or bollards, or improving signage.

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[Shortcrust]

Quirky,

Thanks for the reply.

In reply to your statements

1. Your comment on persuading the SC will not fly. They have an agenda to change their lots and common property. They are impervious to reason; and

2. At the last 5 AGMs the SC which contained none of the current members had no ceiling for SC expenditure and never abused their roles. On the rare instance that they went to NCAT they sought general meeting approval prior to filing an application;

The new SC like many, had a couple of boom box foghorns and several clueless or frightened followers.

 

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